There can be no effective control of corporations while their political
activity remains. To put an end to it will be neither a short nor an easy task.--
Theodore Roosevelt (August 31, 1910)
The men may be the head of the house, says Lainie Kazan
in an oft-quoted line from My Big Fat Greek Wedding, but the women are
the neck and they can turn the head any way they want. In the same way,
our political leaders may be the head of the country, but the greedy horde of
special interests is the neck that turns our politicians gaze this way
and thatincluding away from corporate abuses. Oh sure, official Washington
thumped its chest loudly after the WorldCom story exploded and hastily passed
a corporate responsibility bill it had labored for months to scuttle. But the
web of corruption is far too tightly woven to be unraveled with the few modest
reform measures put in place so far.
The financial scandals of our time were made possible by an unprecedented collusion
between corporate interests and politicians that, despite all the breast-beating
about reform, is still going strong. Together, these two powerful groups tore
down hard-won regulations that restrained the worst capitalist excesses, leaving
in their place a shaky edifice of feckless self-policing and cowed regulators,
powerless to prevent the corporate Chernobyls.
Because corporations are such generous campaign donors and such demanding patrons,
they have been coddled and cuddled and humored by lawmakers until little remained
of a regulatory regime dating back to the last great era of capitalism run amok,
the 1920s. Like teenagers insisting they are mature enough to look after themselves,
the corporate pigs whined furiously about laws and regulations they viewed as
onerouslaws and regulations we had already learned the hard way were essential
to control the forces of greed. But they didnt just whine, they put their
moneyand their considerable political musclewhere their mouths were.
Once corporate America got the keys to the car, Moms credit card, and
the free run of the house, it threw a drunken pool party the likes of which
even Hugh Hefner has never seen. With government regulators forced to butt out,
a wave of what Kevin Phillips, author of Wealth and Democracy, calls financialization
swept the economy. The processes of money movement, securities management,
corporate reorganization, securitization of assets, derivatives trading, and
other forms of financial packaging are steadily replacing the act of making,
growing, and transporting things, Phillips wrote. In this financialization
fun house, real profits arent necessary; you can simply make them up.
Financial shenanigans are so much easier than actually making a company work.
Corporations get their way in Washington by traveling a long-established highway
of corruptionwith well-stocked gift shops at every exit. Lobbying in America
has become a $1.55 billion business. There are 38 lobbyists for each and every
member of Congress. Lobbyists from just one industry alone, the hyperactive
pharmaceutical business, outnumber actual members of Congress by 623 to 535.
Get those guys a dose of Ritalin.
This is the nexus of corporate corruption; the source of all the swill. The
unseemly link between money and political influence is the dark side of capitalism.
It was this link that prompted a full-court-press by key members of Congress
against crucial reforms proposed by ex-SEC chairman Arthur Levitt in the nineties,
reforms that might have prevented some of the bloodletting of the last year.
It was also this link that gave Enron and Kenneth Lay their aura of power,
and made Lay a principal shaper of the administrations energy policy and
an intimate FOG (Friend Of George). This aura didnt come cheap. Enron
and its executives doled out $2.4 million to federal candidates in the 2000
election and were among George Ws biggest donors. Lay and his wife alone
have donated $793,110 to the GOP since Ws dad was in office. Enron has
also spent big bucks lobbying Congress and the White House: $4 million in 1999
and 2000 alone. The money had bought the company a bipartisan whos who
of Washington insidersincluding James Baker, Mack McLarty and Gore 2000
fundraising director Johnny Hayesto help push its corporate agenda.
In exchange for his unwavering support, Kenny Boy was given unprecedented
input into the makeup of the Federal Energy Regulatory Commission (FERC), the
agency charged with regulating Enrons core business. Lay bragged to one
potential nominee about his friends at the White House. He also
personally put the screws to FERC chair Curtis Hebert in an effort to change
his views on electricity deregulation. Hebert didnt oblige, and was soon
the former chairman of FERC, replaced by Enron ally Pat Wood. Wood actually
insisted that the collapse of Enron doesnt seem to be tied too much
to deregulated energy markets. You know that something is rotten in Washington
when the top energy industry regulator is so unabashedly anti-regulation.
We also now know why the White House was willing to go to court to fend off
congressional efforts to find out who Vice President Cheney met with for input
on his Energy Task Force. Turns out the VP and his staff had at least six meetings
with representatives from Enronincluding two with Chairman Lay himselfthe
last of which occurred just six days before the company revealed that it had
vastly overstated its earnings, signaling the beginning of the end for the energy
giant.
The Morally Bankrupt Bankruptcy Act
The link between money and policy is also all too evident in the Bankruptcy
Reform Actyet another glaring case of legislation crafted specifically
for business interests at the expense of the public. Faced with scrambled nest
eggs, sinking pension plans, shaky health coverage, and a gloomy job market,
millions of average Americans are taking it on the chinand in the wallet.
Indeed, one out of every sixty-nine U.S. households filed for personal bankruptcy
in the year ending March 2002.
And its important to note that only 3% of these filings are by people
who abuse the system by living extravagant lifestyles and then leaving their
creditors holding the bag. The majority are actually low- to middle-class people
who cant pay their bills because theyve lost their jobs or been
hit with crippling medical expenses or been enticed into running up unmanageable
credit card balances by easy-credit come-ons and here-today-gone-tomorrow teaser
interest rates.
The Bankruptcy Act would make it much harder for average Americans to start
afresh after they declare bankruptcy, while, not coincidentally, adding billions
of dollars to the bottom line of banks and credit card companies.
Why, then, were our elected representatives so eager to pass the legislation?
Perhaps it has something to do with the $28 million the finance and credit industries
have contributed to political campaigns since 1990including over $4 million
in the 2002 election cycle. Credit card giant MBNA, a major proponent of tougher
bankruptcy standards, was the top individual contributor to President Bushs
2000 campaignwhile two other big credit card issuers, Citigroup and Morgan
Stanley, were among his top-10 donors.
For an especially sleazy example of how this Beltway quid pro quo works, look
no further than the case of Representative Jim Moran, the chief Democratic sponsor
of the bankruptcy bill and, not coincidentally, the founder and co-chair of
the New Democratic Coalitionthe corporate money wing of the party dedicated
to bringing Democrats more in thrall to big business. It seems that back in
1998, Moran was on the verge of being buried under an avalanche of hefty credit
card balances he couldnt pay off. Things looked grim for the Congressmanuntil
he was bailed out by a sweetheart loan orchestrated by the folks at MBNA. The
same folks later claimed that they had offered the loan to Moran not realizing
that he was a member of Congress and that he might be involved in the bankruptcy
bill. Instead, a spokesman said the loan made good business sense.
It sure did, because, in a move as shameless as it is despicable, Moran then
turned around and helped craft a bill that will pay back his loan to MBNA many
times overand make it harder for average consumers who find themselves
in the same jam he was in to get out of debt. Do you think MBNA will ride to
their rescue as well? Or will it do everything in its newly fortified power
to exact its pound of flesh?
It is particularly ironic that Congress was wrapping up its billion-dollar
gift to the banking industry during the same week executives of Citigroup and
J.P. Morgan Chase were lambasted on Capitol Hill for helping Enron defraud shareholders
to the tune of $8 billion. Only in Washington could a pair of companies be publicly
raked over the coalsbranded as bald-faced liars and criminal accessorieson
a Tuesday and then blown an all-is-forgiven make-up smooch on Thursday.
So once again big donors get a kiss on the lips and little guys get a kick
in the rear. And those trying to dig themselves out of a mountain of debt are
not likely to be given a boost by a contracting job market with more people
seeking unemployment benefits than at any time in nearly 20 years.
ALL IN THE FAMILY
Everywhere theres lots of piggies,
Living piggy lives.Piggies, The Beatles
|
Lobbyist
|
Relationship
|
Politician
|
Position in 107th Congress
|
|
Chet
Lott
|
Son
|
Sen.
Trent Lott
(R-Miss.)
|
Senate Minority
Leader
|
|
Linda Daschle
|
Wife
|
Sen. Tom Daschle (D-S. Dak.)
|
Senate Majority Leader
|
|
Joshua Hastert
|
Son
|
Rep. Dennis Hastert
(R-Ill.)
|
Speaker of the House
|
|
Scott Hatch
|
Son
|
Sen. Orrin Hatch (R-Utah)
|
Ranking Member, Judiciary Committee
|
|
Phyllis Landrieu
|
Aunt
|
Sen. Mary Landrieu (D-La.)
|
Appropriations Committee
|
|
John Breaux, Jr.
|
Son
|
Sen. John Breaux (D-La.)
|
Chief Deputy Whip
|
|
Key Reid
|
Son
|
Sen. Harry Reid (D-Nev.)
|
Majority Whip
|
|
Anne Bingaman
|
Wife
|
Sen. Jeff Bingaman (D-N. Mex.)
|
Chairman, Energy and Natural Resources Committee
|
Pigs at the Trough:
How Corporate Greed and Political Corruption Are Undermining America
by Arianna Huffington
Click here to buy the book
9/11: When the Pigs Turned into Vultures
No lobbying campaign in history reveals the depths of the corruption
of corporate America as hauntingly as the one that followed September 11.
The speed with which corporate America reacted to the glimmer of future profits
in the smoldering aftermath of the national crisis was simply atrocious. Before
the fires were even out in New York, the lobbyists had swooped down on Capitol
Hill to make sure they got their piece of the overstuffed pie they were certain
would be served up.
It is now painfully clear that our leadersboth in the current administration
and its predecessorknew that a terrorist attack on American soil would
almost surely happen at some point. So, why didnt they do more to protect
us? Could it be because the public interest didnt have a gaggle of lobbyists
patrolling Congress and the White House offering cash incentives to protect
the American people from fanatics and madmen?
If counterterrorism had been an industry doling out large contributions, our
political leaders would surely have leapt into actionpushing through legislation
to ensure our airports were secure and our intelligence operations were actually
collecting intelligence. Instead, the attacks exposed not only how vulnerable
our airports are but how vulnerable our system of government is when policy
priorities are determined not in response to the public interest but in response
to the best-funded interest groups.
In the absence of a flush lobbying organization representing the public good,
Congress began its 107th session by tuning its fiddle for the burning of Rome
with deeply essential matters like the bankruptcy reform bill. Making its friends
in the banking industry happy was clearly a higher priority than homeland security.
Indeed, the nexus of corruption was one of the few aspects of American life
not shaken to its foundation by the events of 9/11. The airline industry, for
instance, didnt miss a beat in dispatching its lobbyists to take advantage
of the national trauma. In deep financial trouble long before the attacks, the
airlines were nevertheless able to wrangle a gargantuan $15 billion bailout
package from Congresssecured by an army of lobbyists including Linda Daschle.
So the $50 million a year the airline industry spends on lobbying, and the $6.8
million it contributed to both parties last election, turned out to be pretty
smart investments. As for the actual economic victims of the attacks, the billions
did nothing to shield airline workers from massive post-bailout layoffs: 30,000
at Boeing, 27,000 at American Airlines, 20,000 at United, 12,000 at Continental,
and 11,000 at US Airways. Nor did they stop US Airways from declaring bankruptcy.
The pharmaceutical industry was equally eager to mine our national suffering
for nuggets of gold. Of course, to hear the drug companies tell it, they were
as patriotic as Patrick Henry, as generous as Andrew Carnegie, and as selfless
as Mother Teresa. Which would be true if Patrick Henry had proclaimed, Give
me liberty or give me profits, Mother Teresa had enlisted Calcuttas
lepers as lobbyists, and Andrew Carnegie had spent millions on self-aggrandizing
full-page ads.
In a slew of high-level meetings in October and November of 2001 with the likes
of homeland security czar Tom Ridge, HHS Secretary Tommy Thompson, and even
the president himself, the pharmaceutical industrys chief executives eagerly
exploited the panic surrounding the anthrax attacks to make their lifelong legislative
dreams come true: lower drug approval standards, less oversight, less regulation
and immunity from lawsuits.
This rancid lobbying campaign was sweetened with the cherry-flavored rhetoric
of munificent patriotism. The comments of Alan Holmer, the head of PhRMA, a
drug industry lobbying group, were particularly Orwellian. This is not
about profits. It is not about patents, he said of efforts to boosts profits
by enhancing patents. It is about making sure we have an adequate supply
of medicines available to the American people.
In those dark days, as the country dreaded the delivery of the next suspicious
envelope, Peter Dolan, chief executive of Bristol-Meyers, proudly claimed: We
are part of the nations defense system. As an industry, there is a real
opportunity for us to give our resources in a time of great need. Mr.
Dolan must have been using a different dictionary, because mine defines giving
as making a present ofnot figuring out a way to make
a ton of money while taking advantage of the nations bioterrorism fears.
Which is exactly what the industry did. Who remembers the headline-grabbing
deal that Bayer cut with HHS Secretary Thompson to provide Cipro to the government
at the special price of 95 cents a pill, marked down from its previous special
price of $1.77? It sounded gooduntil it came out that it costs Bayer about
20 cents to make a Cipro tablet. The company would still be making hundreds
of millions of dollars off the anthrax attacksto say nothing of the priceless
free publicity the rush on Cipro brought. There will be so much trust,
predicted Bayer CEO Helge Wehmeier at the time. Well benefit greatly
from this. Im sure Americas anthrax victimsthe ones
still alive, at leastwere very happy to hear that.
As if this jagged little pill wasnt hard enough to swallow, it turned
out the Federal Trade Commission was investigating charges that Bayer conspired
to keep a low-cost generic version of Cipro off the market by illegally paying
three of its competitors a total of $200 million.
Think of that: at the very moment the public was freaking out about whether
there was going to be enough of the life-saving drug available, Bayer was actually
paying other companies hundreds of millions of dollars not to produce it. And
the fact that the company just happened to have a spare $200 million sitting
around for corporate payola proves how insanely lucrative the drug business
is.
Joining the shameless mob of business interests smelling blood in the water
after 9/11 was Big Steel. Wrapping themselves in the flag, steel industry lobbyists
descended on Washington in search of new tariffs on imported steel. They insisted
that the controversial levies were a matter of national security.
Senator Rick Santorum, the Pennsylvania Republican, who is a major recipient
of Big Steel donations, said after the attacks: This is an industry with
significant national security implications. Its important from the whole
basic concept of maintaining manufacturing in this country. Its important
to have a vibrant domestic source of steel. Notice the emotional appeal
to some vague basic concept. Like agribusiness, steelmakers like
to tap into Americas image of itself as a country that makes stuff and
grows things, even though the less manly service sector actually constitutes
80% of our nations economy.
Of course, President Bush was calling steel a national security issue
even before the War on Terror. Proving himself a true Man of Steel, in August
2001, having already ordered a review of steel policy, he ranted and raved to
an appreciative crowd of steelworkers in Pittsburgh, demanding that foreign
producers cut their own exports, and repeating the national security canard.
In truth, this national security argument is red, white, and blue rubbish.
Calling it absolute baloney, Robert Crandall, a steel expert at
the Brookings Institution, says that one or two mills could provide all the
steel needed for national defense in any conceivable emergency.
While all these special interests reacted to 9/11 with an outstretched hand,
the food industry responded with a closed mind. Its lobbyistsincluding
trade groups like the National Food Processors Association, the Food Marketing
Institute, and the American Frozen Food Institutefought a guerilla campaign
to stall the Public Health Security and Bioterrorism Bill, which included increased
inspections of imported food, a requirement for food manufacturers to register
with the government and authorizing the FDA to seize suspect food without having
to obtain a court order.
But as bald-faced as each of these groups was in its post-9/11 special pleading,
our political leaders outdid them.
Far from it disrupting their normal run of unabashed corporate toadying, the
war on terrorism enhanced it. Indeed, it gave our leaders cover to put forward
their favorite answer to many a problem America faces: a massive corporate giveaway.
And they even had the gall to call it patriotism. Others, using the English
language more rigorously, called it war profiteering.
The so-called economic stimulus package that passed the House just over a month
after September 11 would have been scurrilous in times of prosperity. But in
a time of national calamity it was, quite simply, grotesque.
The stimulus package was little more than a rehashed corporate wish list, doling
out $115 billion in tax breaks to big business and the wealthiest taxpayers,
and a comparatively measly $14 billion to poor and moderate-income families
in the form of tax rebates and unemployment benefits. And while the tax cuts
for the haves were permanent, those for the have-nots were good for only one
year.
Whats more, the money given to corporate America was given without conditionsnot
tax credits tied to investments, but handouts more likely to end up in CEOs
compensation packages than back in the economy.
All you really needed to know about the true nature of the economic stimulus
package could be found in a largely unnoticed provision that made permanent
a gaping tax loophole that was about to expire. It allowed multinational corporations
such as GE and Ford to preserve forever a key weapon in the corporate tax dodgers
armory: the freedom to shift profits overseas. Tell me, how exactly is providing
incentives to keep money out of our economy supposed to stimulate our economy?
The House bill was so outrageous that even some top GOP officials balked. In
a rare slip from the party line, Treasury Secretary Paul ONeill colorfully
criticized it as show business. Representative Greg Ganske (R-Iowa),
one of seven Republicans who voted against the bill, labeled it an early
Christmas card for already profitable corporations. And the
presidents ornery budget director, Mitch Daniels, informed the nation
in a poetic outburst that the corral gates have been blown open
and the animals are running loose. The galloping beasts in this
case were corporate lobbyists and their chums on the Hill.
The juiciest goody in this box of corporate bonbons was a retroactive repeal
of the corporate alternative minimum tax, a treat that would lead to $25 billion
in instant corporate rebate checks to needy companies such as IBM (slated to
get $1.4 billion), GM ($833 million), and GE ($671 million).
Of the $25 billion refund, over $6.3 billion was earmarked for just 14 corporations.
Predictably, these 14 lucky winners were regular and generous political donors.
Over the last 10 years, theyve poured almost $15 million in soft money
into the national committees of both parties. And, as always, investments made
in politicians are never wasted.
Such a blatant quid pro quo is so indefensible that even the main champions
of the stimulus packagethe grandly named Economic Security and Recovery
Actdidnt try very hard to justify it. Take Representative Dick Armeys
wan effort on Meet the Press. There he was, half-heartedly trying to convince
Tim Russert that we needed these massive tax cuts because the last round of
massive tax cuts were not geared to stimulating the economy. Really? Wasnt
that him at a House subcommittee hearing a few months earlier, selling the last
tax cut bill as just the shot in the arm that this economy needs?
But if something isnt working, why try more of it?
Armey then treated Russert and the rest of us to a lecture on how big corporate
giveaways are the best way to create new jobs. Unfortunately, the facts dont
bear him out. The $15 billion Congress handed the airline industry didnt
keep it from laying off over 150,000 workers. Armey went on to promise that
the new stimulus package will create 170,000 new jobs next year alone.
At the time of Armeys hopeful pronouncement 7.8 million were unemployed
in the country; by fall 2002 that figure had risen to more than 8 million.
So let history record that, after September 11, our leaders brought the nation
together and decided to fight the war on terrorism by making business lunches
fully tax-deductible, offering billions to panhandling American businesses,
and levying no taxes on corporate profits patriotically funneled offshore. Call
it Operation Enduring Avarice. Its enough to put a lump in your throat.
Washingtons consistent siding with the wealthy and the influential over
the public has led to a fundamental breakdown of our democracy. What follows
is a closer look at four stunning examples: corporate Americas fight to
end environmental protections and the craven corporate gluttony of the pharmaceutical,
steel, and farming industries.
KEEP AWAY FROM CHILDREN . . . AND ADULTS
Both the number and the rate of product recalls have been rising steadily.
According to the Consumer Product Safety Commission, which has jurisdiction
over more than 15,000 types of products, there were more recalls in 2001344than
in most years during the previous decade. The Agriculture Department, which
regulates foodstuffs, and the National Highway Traffic Safety Administration,
which does the same for vehicles and associated products, also report sharply
rising numbers of recalls. In a single week in the spring of 2002, 919,000 child
car seats; 124,000 childrens soap-making kits; 23,000 pounds of turkey
meat; 14,000 bottles of a nutritional supplement; and 7,500 exercise machines
were recalled for being unsafe.
Johnson & Johnson
Stopped selling its heartburn drug Propulsid in March 2000 after it
had been connected with 80 deaths.
Wyeth
Pulled painkiller Duract off shelves after it was linked to liver-related
deaths.
Despite a 2002 study revealing that women using Prempro, Wyeths highly
profitable hormone replacement drug, displayed an increased risk of breast cancer,
heart attacks, strokes, and blood clots, the company continues to market the
drug.
Bayer
In August 2001, Bayer withdrew its popularand highly profitablecholesterol
drug Baycol from the market. Over a hundred deaths have been linked to the drug.
Schering-Plough
Alleged to have produced asthma inhalers that didnt contain asthma-fighting
medicationan omission linked to 17 deaths, including that of a 10-year-old
boy.
ConAgra
Recalled nearly 19 million pounds of ground beef in July 2002 contaminated
with the E.coli bacteria. The tainted meat has been connected with 47 cases
of illness in 14 states, and one death in Ohio.
Pacific Gas & Electric
Starting in the 1950s, PG&E dumped carcinogen-laced water into unlined
ponds, from where it was able to seep into Hinkley, Californias water
supply. Residents of the town were not told about the contamination until the
late 1980s. In 1996 PG&E made a $333 million settlement with them and the
story later became Erin Brockovich. Since then a broader case has been filed
against PG&E in other towns, and fifty people have died, lawyers allege,
from cancer, kidney and liver diseases and respiratory problems.
Graco
Recalled nearly one million child car seats because metal hooks and
bars that link the seat to the base may be missing and could fail in a crash
or sudden stop. The recall occurred weeks after Graco removed the seat from
stores without informing consumers of the problem.
Tyco
35 million indoor fire sprinklers were recalled because they may not
work in an actual fire.
Kmart
Recalled about 24,000 Martha Stewart Everyday brand tea kettles because
boiling water could be expelled from the spout.
Honeywell
In October 2001, Honeywell agreed to pay a civil penalty of $800,000
to settle allegations that Duracraft Corp.which Honeywell purchased in
1996failed to report problems with a number of its products to the Consumer
Product Safety Commission in a timely manner.
Roche Pharmaceuticals
Although Roche warns that Accutane can cause serious birth defects,
between 1982 (the year Accutane hit the market) and 2000 nearly 2,000 women
became pregnant while using the drug. Most of those pregnancies ended in abortion,
but of the 383 babies born, nearly half had birth defects.
Bridgestone
The company pulled 6.5 million Firestone tires in 2000 after road safety
authorities linked the tires to 271 deaths and over 750 injuries.
American Home Products
American Home Products finally settled a $3.75 billion lawsuit in January
2002 to resolve claims that its wildly popular obesity drug combination, Fen-Phen,
was connected to heart-valve disease. Over 6 million people took the drug before
it was withdrawn from the market. The FDA has linked Fen-Phen and Redux, another
diet drug made by the company, to over 300 deaths.
Daisy Manufacturing
In October 2001 the Consumer Product Safety Commission filed a lawsuit
against Daisy in an attempt to compel the company to inform consumers that two
of its airgun lines are defective and pose considerable risk of injury or even
death. Daisy has refused to voluntarily recall these guns.
PHONY GRASSROOTS CAMPAIGN
One of the most useful tools in the lobbyists bag of dirty tricks
is the phony grassroots campaign. It works like this:
Step 1: Take out alarming full-page ads in national newspapers that enrage
people by wildly exaggerating the effects of some legislation pending before
Congress: The Federal Government is trying to steal your car!!!
Step 2: Include a list of phone numbers of congressmen or, better yet, a single
toll-free number that ordinary citizens can call to express their opinion on
the issue at hand. Call your congressman immediately and tell him/her
its un-American for the government to steal your car, and he or she should
vote against HR 1342 because its a slippery slope. Next, theyll
be stealing our babies!
Step 3: Include a sneaky little clip-and-mail coupon at the bottom that can
be sent to your congressmans office.
So, lets turn the tables on these grassroots harvesters and send the
coupon below to your representative, senator, governor, or the president. A
comprehensive list of their names and addresses can be found at www.congress.org.
Dear Representative/Senator/Governor/President/Other _____,
As a concerned citizen of (your town and state), I am writing you to ask that
you refrain from making important decisions based on phony write-in campaigns
like this one. Please determine your positions using the best available information,
the advice of impartial experts, and, most of all, your own conscience. Please
ignore suspicious deluges of mail or phone calls which are often solicited dishonestly
by lobbying firms.
Thank you in advance. God bless America (optional),
(Your name)
Excerpted from Pigs at the Trough by Arianna Huffington Copyright © 2003 by Arianna Huffington. Excerpted by permission of Crown, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.